CHAPTER – 1 QUESTIONS

1. Which among the following is the regulator for the insurance industry in India?

I. Insurance Authority of India

II. Insurance Regulatory and Development Authority of India

III. Life Insurance Corporation of India

IV. General Insurance Corporation of India

2. Which among the following is a secondary burden of risk?

I. Business interruption cost

II. Goods damaged cost

III. Setting aside reserves as a provision for meeting potential losses in the future

IV. Hospitalization costs as a result of heart attack

3.Which among the following is a method of risk transfer?

I. Bank FD

II. Insurance

III. Equity shares

IV. Real estate

4. Which among the following scenarios warrants insurance?

I. The sole bread winner of a family might die untimely

II. A person may lose his wallet

III. Stock prices may fall drastically

IV. A house may lose value due to natural wear and tear

5.Which of the below insurance scheme is run by an insurer and not sponsored by the

Government?

I. Employees State Insurance Corporation

II. Crop Insurance Scheme

III. Jan Arogya

IV. All of the above

6. Risk transfer through risk pooling is called ________.

I. Savings

II. Investments

III. Insurance

IV. Risk mitigation

7. The measures to reduce chances of occurrence of risk are known as _____.

I. Risk retention

II. Loss prevention

III. Risk transfer

IV. Risk avoidance

8.By transferring risk to insurer, it becomes possible ___________.

I. To become careless about our assets

II. To make money from insurance in the event of a loss

III. To ignore the potential risks facing our assets

IV. To enjoy peace of mind and plan one’s business more effectively

9.Origins of modern insurance business can be traced to __________.

I. Bottomry

II. Lloyds

III. Rhodes

IV. Malhotra Committee

10.In insurance context “risk retention‟ indicates a situation where _____.

I. Possibility of loss or damage is not there

II. Loss producing event has no value

III. Property is covered by insurance

IV. One decides to bear the risk and its effects

11.Which of the following statement is true?

I. Insurance protects the asset

II. Insurance prevents its loss

III. Insurance reduces possibilities of loss

IV. Insurance pays when there is loss of asset

12. Out of 400 houses, each valued at Rs. 20,000, on an average 4 houses get burnt every year

resulting in a combined loss of Rs. 80,000. What should be the annual contribution of each

house owner to make good this loss?

I. Rs.100/-

II. Rs.200/-

III. Rs.80/-

IV. Rs.400/-

13.Which of the following statements is true?

I. Insurance is a method of sharing the losses of a “few‟ by “many‟

II. Insurance is a method of transferring the risk of an individual to another individual

III. Insurance is a method of sharing the losses of a “many‟ by a “few”

IV. Insurance is a method of transferring the gains of a “few” to the “many”

14.Why do insurers arrange for survey and inspection of the property before acceptance of a

risk?

I. To assess the risk for rating purposes

II. To find out how the insured purchased the property

III. To find out whether other insurers have also inspected the property

IV. To find out whether neighboring property also can be insured

15.Which of the below option best describes the process of insurance?

I. Sharing the losses of many by a few

II. Sharing the losses of few by many

III. One sharing the losses of few

IV. Sharing of losses through subsidy

 CHAPTER – 2 QUESTIONS

1._____________ is not a tangible good.

I. House

II. Insurance

III. Mobile Phone

IV. A pair of jeans

2. _______________ is not an indicator of service quality.

I. Cleverness

II. Reliability

III. Empathy

IV. Responsiveness

3.In India _______________ insurance is mandatory.

I. Motor third party liability

II. Fire insurance for houses

III. Travel insurance for domestic travel

IV. Personal accident

4.One of the methods of reducing insurance cost of an insured is __________

I. Reinsurance

II. Deductible

III. Co-insurance

IV. Rebate

5.A customer having complaint regarding his insurance policy can approach IRDA through

I. IGMS

II. District Consumer Forum

III. Ombudsman

IV. IGMS or District Consumer Forum or Ombudsman

6.Consumer Protection Act deals with:

I. Complaint against insurance companies

II. Complaint against shopkeepers

III. Complaint against brand

IV. Complaint against insurance companies, brand and shopkeepers

7.___________ has jurisdiction to entertain matters where value of goods or services and the

compensation claim is up to 20 lakhs

I. High Court

II. District Forum

III. State Commission

IV. National Commission

8.In customer relationship the first impression is created:

I. By being confident

II. By being on time

III. By showing interest

IV. By being on time, showing interest and being confident

9.Select the correct statement:

I. Ethical behavior is impossible while selling insurance

II. Ethical behavior is not necessary for insurance agents

III. Ethical behavior helps in developing trust between the agent and the insurer

IV. Ethical behavior is expected from the top management only

10.Active Listening involves:

I. Paying attention to the speaker

II. Giving an occasional nod and smile

III. Providing feedback

IV. Paying attention to the speaker, giving an occasional nod and smile and providing feedback
 CHAPTER -3 QUESTIONS

1.Expand the term IGMS.

I. Insurance General Management System

II. Indian General Management System

III. Integrated Grievance Management System

IV. Intelligent Grievance Management System

2.Which of the below consumer grievance redressal agencies would handle consumer disputes

amounting between Rs. 20 lakhs and Rs. 100 lakhs?

I. District Forum

II. State Commission

III. National Commission

IV. Zilla Parishad

3.Which among the following cannot form the basis for a valid consumer complaint?

I. Shopkeeper charging a price above the MRP for a product

II. Shopkeeper not advising the customer on the best product in a category

III. Allergy warning not provided on a drug bottle

IV. Faulty products

4.Which of the below will be the most appropriate option for a customer to lodge an insurance

policy related complaint?

I. Police

II. Supreme Court

III. Insurance Ombudsman

IV. District Court

5.Which of the below statement is correct with regards to the territorial jurisdiction of the

Insurance Ombudsman?

I. Insurance Ombudsman has National jurisdiction

II. Insurance Ombudsman has State jurisdiction

III. Insurance Ombudsman has District jurisdiction

IV. Insurance Ombudsman operates only within the specified territorial limits

6.How is the complaint to be launched with an insurance ombudsman?

I. The complaint is to be made in writing

II. The complaint is to be made orally over the phone

III. The complaint is to be made orally in a face to face manner

IV. The complaint is to be made through newspaper advertisement

7.What is the time limit for approaching an Insurance Ombudsman?

I. Within two years of rejection of the complaint by the insurer

II. Within three years of rejection of the complaint by the insurer

III. Within one year of rejection of the complaint by the insurer

IV. Within one month of rejection of the complaint by the insurer

8.Which among the following is not a pre-requisite for launching a complaint with the

Ombudsman?

I. The complaint must be by an individual on a “Personal Lines‟ insurance

II. The complaint must be lodged within 1 year of the insurer rejecting the complaint

III. Complainant has to approach a consumer forum prior to the Ombudsman

IV. The total relief sought must be within an amount of Rs.20 lakhs.

9.Are there any fee / charges that need to be paid for lodging the complaint with the

Ombudsman?

I. A fee of Rs 100 needs to be paid

II. No fee or charges need to be paid

III. 20% of the relief sought must be paid as fee

IV. 10% of the relief sought must be paid as fee

10.Can a complaint be launched against a private insurer?

I. Complaints can be launched against public insurers only

II. Yes, complaint can be launched against private insurers

III. Complaint can be launched against private insurers only in the Life Sector

IV. Complaint can be launched against private insurers only in the Non-Life Sector
 CHAPTER -4 QUESTIONS

1. Which of the following entities is not regulated by IRDAI?

I. Insurance company

II. Insurance Agent

III. Broker

IV. Employees of insurance company

2. Insurance agent represents the.

I. Insurance company

II. Sub-agent

III. Co-agent

IV. Broker

3. The agency appointment letter is given by.

I. Government of India

II. IRDAI

III. General Insurance Corporation

IV. Insurer

4. What is not prohibited in the latest insurance regulations?

I. Rebates

II. Multilevel marketing

III. Sharing of commission

IV. Commission

5. Identify the statement which is not correct. Insurance agent should.

I. Indicate the scale of commission if asked by the customer

II. Share the commission by way of rebate

III. Disclose his license on demand

IV. Indicate the premium to be charged

6. Which of the following is incorrect?

I. An agent is expected to inform the insurer all relevant facts about the prospectus.
II. Advice the prospectus on nomination

III. Offer rates different than those offered by insurer

IV. Render assistance in claim settlement

7. Which of the following acts is insurance business in India not linked to?

I. ESIC Act, 1948

II. ECGC Act,

III.LIC Act, 1956

IV. Income Tax Act, 1961

8. IRDAI regulations prescribe insurers obligations. Which of the following is incorrect?

I. At point of sale

II. Towards policy servicing

III. Towards control of expenses

IV. Customer relationship management

9. Minimum qualification required for insurance agent is pass.

I. Graduate

II. 10th

III. Post-graduate

IV.. 7th

10. _________ may deal with more than one life insurance company or general insurance company or
both.

I. Agent

II. Surveyor

III. Composite agent

IV. None of the above.

 CHAPTER – 5 – QUESTION PAPERS

1.Which element of a valid contract deals with premium?

I. Offer and acceptance

II. Consideration

III. Free consent

IV. Capacity of parties to contract

2._____________ relates to inaccurate statements, which are made without any fraudulent intention.

I. Misrepresentation

II. Contribution

III. Offer

IV. Representation

3.________________ involves pressure applied through criminal means.

I. Fraud

II. Undue influence

III. Coercion

IV. Mistake

4.Which among the following is true regarding life insurance contracts?

I. They are verbal contracts not legally enforceable

II. They are verbal which are legally enforceable

III. They are contracts between two parties (insurer and insured) as per requirements of Indian

Contract Act, 1872

IV. They are similar to wager contracts

5.Which of the below is not a valid consideration for a contract?

I. Money

II. Property

III. Bribe

IV. Jewelry

6.Which of the below party is not eligible to enter into a life insurance contract?

I. Business owner
II. Minor

III. House wife

IV. Government employee

7.Which of the below action showcases the principle of “Uberrima Fides”?

I. Lying about known medical conditions on an insurance proposal form

II. Not revealing known material facts on an insurance proposal form

III. Disclosing known material facts on an insurance proposal form

IV. Paying premium on time

8.Which of the below is not correct with regards to insurable interest?

I. Father taking out insurance policy on his son

II. Spouses taking out insurance on one another

III. Friends taking out insurance on one another

IV. Employer taking out insurance on employees

9.When is it essential for insurable interest to be present in case of life insurance?

I. At the time of taking out insurance

II. At the time of claim

III. Insurable interest is not required in case of life insurance

IV. Either at time of policy purchase or at the time of claim

10.Find out the proximate cause for death in the following scenario?

Ajay falls off a horse and breaks his back. He lies there in a pool of water and contracts pneumonia. He is
admitted to the hospital and dies because of pneumonia.

I. Pneumonia

II. Broken back

III. Falling off a horse

IV. Surgery
 CHAPTER 6 –QUESTIONS

1. Health is a state of complete

I. Physical wellbeing,

II. Mental and social wellbeing.

III. Absence of disease.

IV. All of the above

2. The first standardized health insurance product for individuals and their families was launched in the
Indian market in the year

I. 1986

II. 2001

III. 2010

IV. 2012

3. Healthcare is broadly categorized as

I. Primary Healthcare

II. Secondary Healthcare

III. Tertiary Healthcare

IV. All of the above

4. The hospitalization indemnity-based annual contract which most popular form of private health
insurance is known as

I. Mediclaim Cover.

II. Fixed Benefit Plan.

III. Both of the above.

IV. None of the above.

5. As per current regulations, an agent can act only on behalf of

I. One general insurance company.

II. One life insurance company.

III. One health insurer and one of each of the mono line insurers.

IV. All of the above.

6. Insurance Brokers may be

I. Individuals

II. Corporates

III. Both

IV. None

7. Which of the following is correct?

I. Third Part Administrators are not authorized to sell insurance but provide administrative services to
insurance companies.

II. TPAs are remunerated by insurers by way of fees which are a percentage of the premium.

III. Both are correct.

IV. Both are incorrect.

8. Insurance Regulatory and Development Authority of India (IRDAI) regulates

I. General Insurance Companies.

II. Health Insurance Companies.

III. Life Insurance Companies.

IV. All of the above.

 CHAPTER 7 – QUESTIONS

1. What is the significance of the principle of contribution?

I. It ensures that the insured also contributes a certain portion of the claim along with the insurer

II. It ensures that all the insured who are a part of the pool, contribute to the claim made by a
participant of the pool, in the proportion of the premium paid by them

III. It ensures that multiple insurers covering the same subject matter; come together and contribute
the claim amount in proportion to their exposure to the subject matter

IV. It ensures that the premium is contributed by the insured in equal installments over the yea

2.As per guidelines, an insurance company has to process an insurance proposal within __________.

I. 7 days

II. 15 days

III. 30 days

IV. 45 days

3. In case the premium payment is made by cheque, then which of the below statement will hold true?

I. The risk may be assumed on the date on which the cheque is posted

II. The risk may be assumed on the date on which the cheque is deposited by the insurance company

III. The risk may be assumed on the date on which the cheque is received by the insurance company

IV. The risk may be assumed on the date on which the cheque is issued by the Proposer

4. Which of the below statement is true with regards to cover notes?

I. Cover notes are predominantly used in life insurance

II. Cover notes are predominantly used in all classes of general insurance

III. Cover notes are predominantly used in health insurance

IV. Cover notes are predominantly used in marine and motor classes of general insurance

5.Which of the below statement is correct with regards to a warranty?

I. A warranty is a condition which is implied without being stated in the policy

II. A warranty is a condition expressly stated in the policy

III. A warranty is a condition expressly stated in the policy and communicated to the insured separately
and not as part of the policy document

IV. If a warranty is breached, the claim can still be paid if it is not material to the risk
6. If certain terms and conditions of the policy need to be modified at the time of issuance, it is done by
setting out the amendments through __________.

I. Warranty

II. Endorsement

III. Alteration

IV. Modifications are not possible

7.Which of the below statement is correct with regards to renewal notice?

I. As per regulations there is a legal obligation on insurers to send a renewal notice to insured, 30 days
before the expiry of the policy

II. As per regulations there is a legal obligation on insurers to send a renewal notice to insured, 15 days
before the expiry of the policy

III. As per regulations there is a legal obligation on insurers to send a renewal notice to insured, 7 days
before the expiry of the policy

IV. As per regulations there is no legal obligation on insurers to send a renewal notice to insured
before the expiry of the policy
 CHAPTER 8 QUESTIONS

1. Though the duration of cover for pre-hospitalization expenses would vary from

insurer to insurer and is defined in the policy, the most common cover is for

________ pre-hospitalization.

I. Fifteen days

II. Thirty days

III. Forty-Five days

IV. Sixty days

2. As per IRDA guidelines, a ________ grace period is allowed for renewal of

individual health policies.

I. Fifteen days

II. Thirty days

III. Forty-Five days

IV. Sixty days

 CHAPTER 9 – QUESTIONS

1. Underwriting is the process of ___________.

I. Marketing insurance products

II. Collecting premiums from customers

III. Risk selection and risk pricing

IV. Selling various insurance products

2.The principle of utmost good faith in underwriting is required to be followed by ___________.

I. The insurer

II. The insured

III. Both the insurer and the insured

IV. The medical examiners

3. Insurable interest refers to ____________.

I. Financial interest of the person in the asset to be insured

II. The asset which is already insured

III. Each insurer’s share of loss when more than one company covers the same

loss

IV. The amount of the loss that can be recovered from the insurer

4. Which of the following statements about medical underwriting is incorrect?

I. It involves high cost in collecting and assessing medical reports.

II. Current health status and age are the key factors in medical underwriting

for health insurance.

III. Proposers have to undergo medical and pathological investigations to assess

their health risk profile.

IV. Percentage assessment is made on each component of the risk.

5.

1) In a group health insurance, any of the individual constituting the group

could anti-select against the insurer.

2) Group health insurance provides coverage only to employer-employee

groups.
I. Statement 1 is true and statement 2 is false

II. Statement 2 is true and statement 1 is false

III. Statement 1 and statement 2 are true

IV. Statement 1 and statement 2 are false

6. Which of the following factor does not affect the morbidity of an individual?

I. Gender

II. Spouse job

III. Habits

IV. Residence location

7. According to the principle of indemnity, the insured is paid for __________.

I. The actual losses to the extent of the sum insured

II. The sum insured irrespective of the amount actually spent

III. A fixed amount agreed between both the parties

IV. The actual losses irrespective of the sum assured

8.The first and the primary source of information about an applicant, for the underwriter is his
________________.

I. Age proof documents

II. Financial documents

III. Previous medical records

IV. Proposal form

9. The underwriting process is completed when ___________________.

I. All the critical information related to the health and personal details of the

proposer is collected through the proposal form

II. All the medical examinations and tests of the proposer are completed

III. The received information is carefully assessed and classified into

appropriate risk categories

IV. The policy is issued to the proposer after risk selection and pricing.

10. Which of the following statements about the numerical rating method is incorrect?
I. Numerical rating method provides greater speed in the handling of a large business with the help of
trained personnel.232

II. Analysis of difficult or doubtful cases is not possible on the basis of numerical points without
medical referees or experts.

III. This method can be used by persons without any specific knowledge of medical science.

IV. It ensures consistency between the decisions of different underwriters.

 CHAPTER 10-QUESTIONS

1.Who among the following is not a stakeholder in insurance claim process?

I. Insurance company shareholders

II. Human Resource Department

III. Regulator

IV. TPA

2.Which of the following document is maintained at the hospital detailing all treatment done to an in-
patient?

I. Investigation report

II. Settlement sheet

III. Case paper

IV. Hospital registration certificate

3.The amount of provision made for all claims in the books of the insurer based on the status of the
claims is known as ________.

I. Pooling

II. Provisioning

III. Reserving

IV. Investing

4.Which of the following documents are not required to be submitted for Permanent Total Disability
claim?

I. Duly completed Personal Accident claim form signed by the claimant.

II. Attested copy of First Information Report if applicable.

III. Permanent disability certificate from a civil surgeon or any equivalent competent doctors certifying
the disability of the insured.

IV. Fitness certificate from the treating doctor certifying that the insured is fit to perform his normal
duties.

5. ________________ are paid upfront by Assistance Company and later claimed from insurance
company.

I. Bail bond cases

II. Personal accident claims

III. Overseas travel insurance claims

IV. Untenable claims

6. Who among the following is considered as primary stakeholder in insurance claim process?

I. Customers

II. Owners

III. Underwriters

IV. Insurance agents/brokers

7.Girish Saxena’s insurance claim was denied by insurance company. In case of a denial, what is the
option available to Girish Saxena, apart from the representation to the insurer?

I. To approach Government

II. To approach legal authorities

III. To approach insurance agent

IV. Nothing could be done in case of case denial

8. During investigation, of a health insurance claim presented by Rajiv Mehto, insurance company finds
that instead of Rajiv Mehto, his brother Rajesh Mehto had been admitted to hospital for treatment. The
policy of Rajiv Mehto is not a family floater plan. This is an example of ___________fraud.

I. Impersonation

II. Fabrication of documents

III. Exaggeration of expenses

IV. Outpatient treatment converted to in-patient / hospitalization278

9. Under which of the following condition, is domiciliary hospitalization is covered in a health insurance
policy?

I. The condition of the patient is such that he/she can be removed to the

Hospital/Nursing Home, but prefer not to

II. The patient cannot be removed to Hospital/Nursing Home for lack of

accommodation therein

III. The treatment can be carried out only in hospital/Nursing home

IV. Duration of hospitalization is exceeding 24 hours

10. Which of the following codes capture the procedures performed to treat the illness?

I. ICD
II. DCI

III. CPT

IV. PCT
 CHAPTER 11-QUESTIONS

1. Which one of the following does not represent an insurable risk?

I. Fire

II. Stolen goods

III. Burglary

IV. Loss of goods due to ship capsizing

2. Which among the following cannot be an element in a valid insurance contract?

I. Offer and acceptance

II. Coercion

III. Consideration

3. Mr. Pinto contracted pneumonia as a result of lying on wet ground after a horse riding accident.
The pneumonia resulted in death of Mr. Pinto. What is the proximate cause of the death?

I. Pneumonia

II. Horse

III. Horse riding accident

IV. Bad luck

4. Moral hazard means:

I. Dishonesty or character defects in an individual

II. Honesty and values in an individual

III. Risk of religious beliefs

IV. Hazard of the property to be insured

5. Risk indicates:

I. Fear of unknown

II. Chance of loss

III. Disturbances at public place

IV. Hazard

6.______________ means spreading one’s investment in different kinds of assets.

I. Pooling

II. Diversification
III. Gambling312

IV. Dynamic risk

7._____________ is not an example of an asset.

I. House

II. Sunlight

III. Plant and machinery

IV. Motor car

8. ______________ is not an example of risk.

I. Damage to car due to accident

II. Damage of cargo due to rain water

III. Damage to car tyre due to wear and tear

IV. Damage to property due to fire

9.Earthquake is an example of:

I. Catastrophic risk

II. Dynamic risk

III. Marginal risk

IV. Speculative risk

10.Select the most appropriate logical equivalence for the statement.

Statement: Insurance cannot protect an asset from loss or damage.

I. True

II. False

III. Partially true

IV. Not necessarily true

11. __________________ means transfer of all rights and remedies, with respect to

the subject matter of insurance, from insured to insurer.

I. Contribution

II. Subrogation

III. Legal hazard

IV. Risk pooling313

12.An example of a fact which need not be disclosed unless asked for is

______________ by the insurer.

I. Age of the insured

II. Presence of fire extinguisher

III. Heart ailment

IV. Other insurance details

13.________________ is a wrong statement made during negotiation of a contract.

I. Misrepresentation

II. Contribution

III. Offer

IV. Representation
 CHAPTER-12 QUESTIONS

1.__________ is the maximum limit of liability of insurer under the policy

I. Sum insured

II. Premium

III. Surrender value

IV. Amount of loss

2._______________ is the consideration or price paid by insured under a contract

I. Claim amount

II. Surrender value

III. Maturity amount

IV. Premium

3.A document which provides an evidence of contract of insurance is called________

I. Policy

II. Cover note

III. Endorsement

IV. Certificate of insurance

4.The duty of disclosure arises

I. Prior to inception of the policy

II. After inception of the policy

III. Prior to inception and continues during the policy

IV. There is no such duty

5. Material fact

I. Is the value of all material covered in a policy

II. Not important for assessing the risk

III. Is important as it influences the decision of the underwriter

IV. Is not important as it has no bearing on the decision of the underwriter342

6. Fire proposal seeks to know

I. Process of manufacture

II. Details of material stored

III. Construction of building

IV. All the above

7.Premium cannot be received

I. In cash

II. By cheque

III. By promissory note

IV. By credit card

8.The certificate of Motor Insurance

I. Is not mandatory

II. Has to be kept with self always

III. Has to be kept in the car always

IV. Has to be kept in the bank locker

9.A warranty

I. Is a condition expressly stated in the policy

II. Has to be complied with

III. Both a and b

IV. None of the above

10.Renewal Notice for Motor insurance is issued by

I. The Insured before expiry of the policy

II. The Insurer before expiry of the policy

III. The Insured after expiry of the policy

IV. The Insurer after expiry of the policy

 CHAPTER-13 QUESTIONS

1. Identify the two factors that affect insurance ratemaking.

I. Probability and severity of risk

II. Source and nature of risk

III. Source and timing of risk

IV. Nature and impact of risk

2.What is pure premium?

I. Premium sufficiently big enough to pay for losses only

II. Premium applicable to marginal members of the society

III. Premium after loading for administrative costs

IV. Premium derived from the most recent loss experience period

3.What is expected of an agent when she detects a moral hazard?

I. Continue with the insurance as before

II. Report the same to the insurer

III. Ask for a share in the claims

IV Test Yourself 4

4. Suggest an insurance scheme for a doctor to protect him from any claims of negligence against
him.

I. Personal accident insurance

II. Liability insurance

III. Marine hull insurance

IV. Health insurance. Turn a blind eye

5. _____________ decides whether to accept or not to accept the risk.

I. Assured

II. Underwriter

III. Agent

IV. Surveyor

6._______________ is the price of a given unit of insurance.

I. Rate
II. Premium

III. Sum Assured

IV. Bonus375

7.___________ is the maximum amount that an insurance company will indemnify

to someone who files a claim.

I. Sum insured

II. Premium

III. Rider

IV. Benefits

8.______________ is not a source of information for underwriter.

I. Annual accounts of a proposer

II. Pre-acceptance risk survey of the asset

III. Proposal form

IV. Registration certificate of insurer

9.Hazards are:

I. Factors that increase the impact of losses

II. Factors that increases the frequency of loss

III. Factors that increase the impact and severity of losses

IV. Factors that decrease the impact and severity of losses

10. Which of the following is true?

Physical Hazards:

I. Are not important for rate making

II. Cannot be ascertained

III. Can be calculated from the balance sheet

IV. Can be ascertained from information given in a proposal form

11. In motor insurance one of the warranties is:

I. The vehicle should be washed daily

II. The vehicle should not be used for speed testing

III. The vehicle should not be used for carrying luggage for personal use
IV. The vehicle should not be run more than 200 km per day.376

12.The purpose of deductible clause is to:

I. To avoid claim payment

II. To eliminate payment of small claims

III. To harass the policyholder

IV. To increase the premium

13.Installation of sprinkler system in the premises:

I. Increases risk

II. Decreases the risk

III. Neither increases nor decreases risk

IV. Increases risk of hooding

14.Insured‟s declared value in motor insurance includes:

I. Registration

II. Manufacturer’s cost price

III. Manufacturer’s selling price

IV. Arbitrary price component

 CHAPTER 14- QUESTIONS

1. Which of the below statement is correct with regards to a householder’s insurance policy?

I. A named peril policy may be purchased as a less expensive alternative to a comprehensive coverage
policy that tends to offer coverage to most perils.

II. A comprehensive policy that tends to offer coverage to most perils; may be purchased as a less
expensive alternative to a named peril policy.382

III. A named peril policy or comprehensive policy comes at the same price.

IV. With regards to a householder’s policy, only a named peril policy can be bought and comprehensive
policies are not available.

2. Under the shopkeeper policy, the insured may opt for an additional „Fixed plate glass and
sanitary fittings‟ cover. This will cover accidental loss of damage to which of the following?

I. Fixed plate glass

II. Sanitary fittings

III. Neon signs

IV. All of the above

3. Motor insurance should be taken in whose name?

I. In the name of the vehicle owner whose name is registered with Regional Transport Authority

II. If the person who will be driving the vehicle is different from the owner, then in the name of the
person who will be driving the vehicle, subject to approval from Regional Transport Authority

III. In the name of any family member of the vehicle owner, including the vehicle owner, subject to
approval from the Regional Transport Authority

IV. If the person who will be driving the vehicle is different from the owner, then primary policy should
be in the name of the vehicle owner and add-on cover in the name of the person who will be driving the
vehicle.

4.In householder’s insurance

I. Gold and silver ornaments are covered

II. Contents of one’s shop is covered

III. Cars owned by the family are covered

IV. Parcels sent by post are covered during transit.

5. Householder’s insurance covers

I. Only the structure of the home

II. Only the Contents of the home

III. Both the structure and contents

IV. Both Structure and contents only when insured is not at home

6.In shop keeper’s insurance, which of the following are not covered?

I. Machinery breakdown

II. Malicious damage

III. Business interruption

IV. Willful destruction by insured

7. In shop keeper’s insurance which of the following are usually not covered

I. Money in till/counter at business premises

II. Money in transit from bank to business premises

III. Money in safe at business premises

IV. Money carried by customer to business premises.

8. Shop insurance covers

I. Dishonest acts of employees

II. Dishonest acts of insured

III. Dishonest acts of customers

IV. Dishonest acts of money lenders

 CHAPTER 15- QUESTIONS

1.A fire policy for commercial risks covers the perils of ________

I. Explosion

II. Implosion

III. Both of the above

IV. None of the above

2.A business interruption insurance policy can be taken only in conjunction with ____________.

I. Standard fire and special perils policy

II. Standard fire and marine policy

III. Standard and special perils policy

IV. Standard Engineering and marine policy

3.The premium for burglary policy depends on ______________.

I. Nature of insured policy

II. Moral hazard of the insured himself

III. Construction and location of the premises

IV. All of the above

4.Which of the below is covered under a money insurance policy?

I. Shortage due to error or omission

II. Loss of cash from one’s premises due to burglary

III. Loss of money that has been entrusted to other than authorized person

IV. Riot strike and terrorism

5.Fidelity guarantee insurance indemnifies ________________.

I. Employers against the financial loss suffered by them due to fraud or dishonesty of their employees

II. employees against the financial loss suffered by them due to fraud or dishonesty of their employer

III. Employees and employers against the financial loss suffered by them due to fraud or dishonesty of
third party

IV. Shareholders against the financial loss suffered by them due to fraud or dishonesty of the company
management

6.Which of the below can be covered under a banker’s indemnity insurance policy?
I. Money securities lost or damaged whilst within the premises due to fire

II. Forgery or alteration of cheque

III. Dishonesty of employees with reference to money

IV. All of the above

7.In case of a Jeweler’s Block Policy, damage to property insured when it is in transit by registered parcel
will be covered under ____________.

I. Section I

II. Section II

III. Section III

IV. Section IV

8.Delay in start-up policy is also known as ______________.

I. Machinery Loss of Profits cover

II. Advance Loss of Profits cover

III. Contractors All Risk cover

IV. Contractors Plant & Machinery cover

9.Which of the following is not covered under Industrial All Risks insurance?

I. Fire and special perils as per fire insurance practice

II. Larceny

III. Machinery breakdown

IV. Electronic equipment

10.Which branch of insurance offers cover against war perils?

I. Marine policies

II. Aviation policies

III. Both of the above

IV. None of the above

11.Under the Public Liability Insurance Act, 1991, how much is the compensation

payable for actual medical expenses?

I. Rs. 6,250

II. Rs, 12,500

III. Rs. 25,000

IV. Rs. 50,000

12. In Engineering insurance CAR stands for

I. Motor Car

II. Contractors All Risks

III. Company’s All Risks

IV. Companies All Requirements

13. An employer insures himself from dishonest act of his employees by _________

I. Employees compensation policy

II. Public Liability Insurance policy

III. Fidelity Guarantee Insurance policy

IV. Declaration policy.

14._________ refers to the body of the ship.

I. Hull

II. Cargo

III. Piracy

IV. Jettison

15. Policy which covers loss or damage to aircraft is ______________.

I. Statutory liability

II. Property insurance

III. Aviation insurance

IV. Money insurance

16. Fire Insurance Policy does not cover damage to property even as add-on cover due to___________.

I. Floods

II. Earthquake

III. Fire

IV. Bombing due to war427

17.Consequential Loss (Fire Policy) covers:

I. Loss of profit due to damage to factory

II. Loss of Goodwill

III. Material wear & tear in machinery

IV. Losses due to foreign exchange fluctuations

18. Premium in Burglary depends on:

I. Security measures

II. Location of Premises

III. Nature of property

IV. All of the above

19. Contractor’s All Risk Policy is a variation of:

I. Fire Insurance

II. Life Insurance

III. Engineering Insurance

IV. Marine Insurance

20. Employee’s Compensation Policy is a type of

I. Liability Insurance

II. Fire Insurance

III. Marine Cargo Insurance

IV. Engineering Insurance

21.Money Insurance Policy covers:

I. Cash in hand

II. Money invested in Mutual Fund

III. Money lying in Saving Bank

IV. Money deposited with post office.

 CHAPTER-16 QUESTIONS

1.Which of the following activities would not be categorized under professional settlement of claims?

I. Seeking information relating to the cause of the loss

II. Approaching the claim with a prejudice

III. Ascertaining whether the loss was a result of an insured peril

IV. Quantifying the amount payable under the claim

2.Raj is involved in a car accident. His car is insured under a motor insurance policy. Which among the
following is the most appropriate thing for Raj to do?

I. Notify the insurer of the loss as soon as reasonably possible

II. Notify the insurer at the time of insurance renewal

III. Damage the car further so as to receive a bigger compensation

IV. Ignore the damage

3.Compare claims investigation and claims assessment.

I. Both claims investigation and assessment are the same thing

II. Investigation tries to determine the validity of the claim whereas assessment is more concerned
with the cause and extent of the loss

III. Assessment tries to determine the validity of the claim whereas investigation is more concerned with
the cause and extent of the loss

IV. Investigation is done before the claim is paid and assessment is done after the claim is paid

4.Who is the licensing authority for surveyors?

I. Surveyor Association of India

II. Surveyor Regulatory and Development Authority

III. Insurance Regulatory and Development Authority of India

IV. Government of India

5.Which among the following documents is most likely to be requested while examining a cyclone
damage claim?

I. Coroner’s report

II. Report from Fire Brigade

III. Police report

IV. Report from Meteorological Department

6.Under which principle can the insurer assume the rights of the insured in order to recover from a third
party the loss paid under a policy?

I. Contribution

II. Discharge

III. Subrogation

IV. Indemnity

7.If the insurer decides that a certain loss is not payable because it is not covered under the policy then
who decides on such matters?

I. Insurer’s decision is final

II. Umpire

III. Arbitrator

IV. Court of Law

8.Intimation of loss is to be made:

I. at the exact time of the loss

II. after 15 days

III. as soon as reasonably possible

IV. any time after the loss

9.Investigation of loss is done by:

I. unlicensed surveyor

II. licensed and qualified surveyor

III. insured’s representative

IV. any person with a degree in engineering

10. For personal accident claims, report of________ is necessary.

I. Surveyor

II. Doctor

III. Police

IV. Coroner

11.Independent surveyors are required for claims equal to or above_______ as per the Insurance Act.

I. Rs. 40,000
II. Rs. 15,000

III. Rs. 20,000

IV. Rs. 25,000

12.Claims assessed outside the country in case of travel insurance policies are assessed by:

I. Indian surveyors

II. Local surveyors in the country of loss

III. Insurer’s own employees

IV. Claims settling agents named in the policy447

13.In case of a fire claim, a report from the fire brigade:

I. is not required

II. is optional for the insured

III. is necessary

IV. is part of the police report

14. What is TAT?

I. Time and Turn

II. Till a Time

III. Time and Tide

IV. Turnaround Time

15. On payment of loss, salvage belongs to:

I. Surveyors

II. Insured

III. Insurer

IV. Local authorities

16. Arbitration is a claim settlement process done ______________.

I. in the court of law

II. by a group of surveyors

III. by arbitrator(s) chosen by the parties involved

IV. arbitrarily by the insurance company’s employees

17. Insurers under right of subrogation are allowed to recover the loss paid from:
I. Shipping companies only

II. Railways and road carriers only

III. Airlines and Port Trusts only

IV. Shipping companies and railway and road carriers and airlines and port trusts